GRANT'S DESI ACHIEVER
WHAT’S IN A NAME? EFFICIENCY!
Shrad Rao is the founder and CEO of Wagepoint.
By SHAGORIKA EASWAR
Shrad Rao changed the spelling of his name, Sharad, to improve efficiency.
“This was back in university, twenty years ago,” he says, explaining the when and the why. “People were struggling with my name, one person called me Shrub! I’m a creature of efficiency, and I thought, this enunciating one’s name slowly and clearly at the beginning of each conversation takes too much time, let’s shorten that cycle! Let’s really get to know each other, let’s talk about more interesting stuff.”
Stuff like launching his own business.
He always knew he wanted to be an entrepreneur.
“I naturally understood markets and economics, but I needed someone to teach me accounting. In Dubai, where I grew up, I had heard of an accountant who embezzled $300,000 and I didn’t want that to ever happen to me. Also, very often, how a company looks on paper can be very different in reality and I wanted to understand how things work.”
Unlike many kids from desi families, he didn’t go straight to university from school, instead taking a break to work for a year.
“I was always working for skills I needed to boost me on my entrepreneurial journey.”
Rao came to Canada in 2001 at age 19 as an international student, and graduated from University of New Brunswick in 2005 with a business degree and a major in accounting.
After a few years of valuable experience in the world of business and finance, he launched Wagepoint, a payroll software for small businesses, when he was 31. Rao describes Wagepoint as simple payroll software designed for small businesses and backed by the world’s friendliest team.
Fast forward to today – Wagepoint provides payroll software to more than 12,000 small businesses across North America.
Their simple and intuitive software and leading customer support makes it easier for small businesses to automate payroll, which is often one of the most cumbersome and intimidating back-office functions. With Wagepoint, they no longer have to calculate wages and taxes manually. Additionally, Wagepoint can also automate the reporting and payment of taxes to the proper organizations and authorities. It’s faster, there are fewer mistakes, and employees can simply log in to the secure online portal to review their pay history, including every direct deposit to their account.
There is growing recognition among the business community about the importance of using software to make payroll flexible and simple. According to a recent survey of Canadian small businesses by Wagepoint, 72 per cent of small business owners believe payroll is as important as sales, invoicing, and general accounting, while 40 per cent of SMBs that reduced headcount due to COVID-19 feel payroll needs to be flexible enough to accommodate quick changes to their workforce.
When they launched, it was just Rao and co-founders Ryan Dineen and Bill Murphy.
“I’m not a developer, though I have some technical chops. Ryan developed the software engine and Bill helped with funding.”
Leena Thampan, his partner at the time and now his wife, helped build the marketing flywheel and is now the chief product officer .
“I left my job with just $18,000 in the bank, and gave myself one year. Leena helped backfill some of the living expenses! She’s been critical to our success and I am eternally grateful.”
Atlantic Canada Opportunities Agency in Halifax made an initial investment of $500,000 and followed that up with two more over the next two years. “They were awesome!” says Rao. “Those were the most helpful dollars.”
They also received funding from Timia Capital, and Ray Sharma of Extreme Venture Partners was on board within just 15 minutes of meeting Rao.
“That’s one of my favourite stories!” says Rao.
Today, they move three-and-a-half billion dollars a year in payroll and recently announced $10 million in funding from Providence Strategic Growth (PSG) that will be used to fuel Wagepoint’s next phase of growth including continued product innovation, scaling the go-to-market and best-in-class customer support organization, and pursuing strategic acquisitions, in order to better serve Wagepoint’s small business clients across North America.
“We see this partnership with PSG as a big vote of confidence for Wagepoint and an incredible win for our customers – who we can now support and help thrive even more with the substantial growth capital investment,” says Rao. “It takes a lot of hard work to build a high-growth company in Canada, especially right now. We’ve gotten here by being laser-focused on giving entrepreneurs, accountants, and bookkeepers the tools and flexibility they need to succeed. This investment is a big step forward for the Wagepoint family, which includes our small business customers and partners – and it’s only the beginning. The goal is to become number one in Canada.”
Remarkably – seeing as how his business idea was just that, a concept, not an actual physical product – his parents were very supportive. They knew he would figure it out. He also had the safety of a good education and could always get back into the workforce fairly easily, they reasoned.
“I also know when to call it quits,” says Rao. “I’ve never been afraid of failure. Of course it pinches, but I don’t sit around and lament. I pick up, dust off, and move on.”
His brother Sushant was recently asked what he attributed Rao’s success to. “Raw confidence” was his response.
“So much for hard work!” says Rao with a laugh.
While their software was being developed, Rao believed the best way for him to contribute was to find companies and build the best product for them. He went out and met hundreds of business owners.
“I’ve talked payroll at a dessert place – during their busy hour!”
By the time they launched, they understood what was needed.
“You have to have extreme empathy to understand not just what A needs and B needs, but also how that can be built into a product that can serve needs across the board.”
It’s obviously a winning formula. Their Net Promoter Score (NPS), which asks clients if they would recommend their services to others, is 70.
“That’s considered world-class,” explains Rao. “The best companies in the world have scores like that.”
An Eastern philosophy, a harmonious world-view has informed his approach to running the business.
“I believe that we are all the same, we have the same needs, wants, desires,” says Rao. “That’s just the way I see the world and it helps foster a culture of camaraderie.”
Their work force of 70 is diverse in every way – age, gender, ethnicity, location. And they have always been fully remote, not wanting to be limited by geography in finding the best talent.
It used to be that when one was at the office, one was ‘working’ and when one left the office, one was ‘not working’ says Rao. But the workplace has changed, and dramatically so, as was evident in the work-from-home scenario triggered by COVID-19.
“You had to be perceived to be working. Now the accountability has gone through the roof. The onus has shifted, and those good at what they do actually like that because now it’s all about actual work, never mind where you do it from.”
When they do meet – or met, pre-social distancing – there’s much laughter. And hugs.
“If we met every day, would we hug each other? Would you hug the CEO of your company? But I get hugs! It’s all a mindset.”
This culture of inclusivity has paid rich dividends.
Rao mentions an e-mail they received from a client who admitted to being a little grumpy when they began working together. “But I received so much kindness and understanding from your team that I now feel I should be that way with everyone I deal with.”
These are just simple rules to live by, says Rao. “We attract high EQ customers because we display high EQ.”
Of course, there might also be pitfalls in applying an ancient philosophy to modern business, as Rao reveals.
“One of the first mistakes I made stemmed from this thinking. In our early days, at the time of establishing the company, my partner asked how much equity I wanted. I said, ‘Whatever you think good’. I believed he was older and wiser and we are taught to respect that. I was coming in from a reference point of deferring to age. We expect older people to look after the interests of those younger than them. I would never respond in the same manner today. But would I change anything? No. It was a learning experience and my thinking has brought me here, it makes me who I am.”
Shrad Rao with his wife Leena Thampan, the chief product officer at Wagepoint, and Ryan Dineen, the company’s co-founder,
In his free time, Rao enjoys reading and watching movies. “I’m also sorta learning the ukulele and I love travelling and hiking.”
Asked for guidance by international students, he recounts his own experience.
“I didn’t really experience a culture shock. Unless you count the fact that moving from bustling Dubai to a very quiet Saint John was bit unnerving initially – I wasn’t used to so much space and such few people! I’d look down the street and see a lone figure in the distance! A small town can be a closed society, but students build their own communities. I was part of so many groups. I don’t see the world in terms of differences. Habits and ways of doing things are all nuances, people are people.”
It helped that he is very fluent in English. When someone asked him if it was his first language, he replied, “It’s definitely not my first language, but it’s my only language.”
And his tips on finding success as an entrepreneur?
Focus on the most important tasks for just the next step in front of you. Don’t worry about what happens 10 steps ahead.
Self-awareness is critical. Be honest with yourself.
Try to keep your ego flat because great ideas come from everywhere and you should never be so sure of yourself that you miss them.
As for what’s next, Rao says he’s too focused on the present to even think about what happens next.
“But I am hoping to take my skills and hopefully find a way to give back to the world. I am passionate about education and levelling the playing field for kids in impoverished circumstances. I’ve recently found this organization, Nanhi Kali, and I am really impressed by their approach. I hope to get more involved in this kind of thing in the future.”
• Grant’s is proud to present this series about people who are making a difference in the community. Represented by PMA Canada (www.pmacanada.com).